Govt turns down request for hike in aeronautical charges for Delhi, Mumbai airports
21 May 2008
New Delhi: Apprehending a consumer backlash, as evidenced in Bangalore, the government has decided to turn down a request by GMR Infra and GVK Group to hike Delhi and Mumbai airport user development charges by 10%. The request was made by both operators under the provisions of the concession agreement signed with the government, which allows them to increase aeronautical charges levied on airlines and passengers, after two years of taking over the projects.
Providing reasons for turning down the request, civil aviation minister, Praful Patel, said that the move would have increased pressure on airlines that are already under severe financial pressure because of galloping oil prices. High aviation turbine fuel (ATF) prices already has airlines staring at a lot of red ink on their books. He also pointed out that average air fares were lower than 2004 levels, with ATF alone being six times more expensive now.
He said that with airlines making huge losses additional burden, such as higher aeronautical charges, would not be allowed until there was an improvement in the situation. He said growth for the sector was slipping from double digits to single digits, and load factors were falling because of high fares.
He said that from the inspiring 20-30% domestic sector traffic growth recorded over the past three years, growth in April this year was down to just 8.65%, as compared to the same month last year.
The Delhi and Mumbai airports were allowed to charge 10% higher aeronautical charges from the third and the fourth years.
